Salary Account Vs Savings Account

A bank account is usually the first thing you need to begin your Savings journey. Indian Banks offer a wide variety of accounts wherein you can deposit money, earn interest income and build a corpus. Of these, the most common accounts are the Regular Savings Account and the Salary Account. In this article, we have compared the differences between Salary Account and Savings Account.

What is a Salary Account?

A Salary Account is a dedicated account where your employer deposits your monthly income or salary. Companies and corporations typically tie-up with banks to open Salary Accounts for their employees.

What is a Savings Account?

A Savings Account is one in which you can deposit money to build your savings. You can use this account to manage your day to day finances. Savings Accounts can be of various types, and a Salary Account is also considered a type of Savings Account.

Salary Account vs Savings Account – Comparing the Differences

The following are the differences between Salary Account and Savings Account.

• Minimum Balance Requirements

You can withdraw all the funds from the salary account, which is why it is also known as a zero balance account. However, with Savings Accounts, you must maintain the minimum average balance required by the bank. This amount differs from bank to bank.

• Account Holding and Operation Status

Employers open Salary Accounts for their employees, and the account is held and operated on an individual basis. As for Savings Account, you can open the account on an individual or joint basis and operate it jointly as well.

• Eligibility Criteria

You need to be employed with an organisation to open a Salary account and qualify for the benefits that go with it. However, there are no specific eligibility criteria to open a Savings Account. Anyone who can provide the necessary documents required by the bank can open this account.

• Account Conversion

Banks will automatically convert your Salary Account to a Regular Savings Account if no salary has been credited into it for three consecutive months. On the other hand, if you have a Savings Account with the same bank with which your employer has a banking relationship, you can convert the Savings Account to a Salary Account.

• Choice of Bank

Since companies have tie-ups with banks, their employees do not get to choose their preferred bank for Salary Accounts. Conversely, when you open a Savings Account, you can do so in your preferred bank after assessing their average balance requirements, interest offered on savings, and other critical parameters.

Similarities Between a Savings Account and a Salary Accounts

The common attributes between Salary and Savings Accounts are as follows.

• You can earn interest income on both Salary and Savings Accounts deposits.
• Banks provide you with chequebooks, passbooks and debit cards with both accounts.
• You can access both accounts remotely using services like internet and mobile banking.
• You can efficiently conduct online fund transfers via NEFT, IMPS, RTGS, UPI payments and wallets, etc., from both accounts.
• You can just as easily receive payments from anyone into both accounts.
• Banks provide SMS alerts and notifications for all transactions conducted on both accounts.
• You can utilise all the banking facilities such as loan applications, opening fixed deposits or recurring deposits, making investments, checking account balances, etc., with both Savings and Salary Accounts.

Account Opening and Interest Rates

In most cases, a bank representative visits your office to open your Salary Account. You only need to provide a copy of your PAN, ID, and address proof document, along with your photographs. The bank representative hands over an instant account-opening kit with the cheque book, passbook, debit card, and internet banking information. If you wish, you may apply for a personalised debit with your name embossed on it.

Unlike Salary Accounts, banks allow you to open a Savings Account online from the comfort of your home. You simply need to visit your preferred bank’s website, fill out an online form and submit scanned or soft copies of your PAN, ID, and address proof documents. The bank may conduct a physical or video-KYC procedure, after which it opens your account and sends you the cheque book, passbook, debit card, and internet banking information.

Note that the interest rates for both accounts depend on the bank with which you have the account.

Open Your Account with Bank of Baroda

Whether you wish to open a Bank of Baroda Salary Account or Savings Account, you can do so conveniently. While anyone can open a Bank of Baroda Savings Account, you must check with your employer if you can open your Salary Account with us. Enjoy attractive interest rates on your account deposits and take advantage of the incredible suite of facilities we offer to you as a Bank of Baroda customer.